Table of Contents
What are the disadvantages of a VA loan?
- You May Have Less Equity in Your Home. …
- VA Loans Cannot be Used for Vacation or Rental Properties. …
- Seller Resistance to VA Financing. …
- The Funding Fee is Higher for Subsequent Use. …
- Not All Lenders Offer – or Understand – VA Loans.
What is a VA guaranteed loan?
A loan guarantee is a commitment on behalf of the VA to purchase the property from the lender if the veteran defaults on the loan. A loan guarantee is attractive to lenders, as they know if the veteran defaults they will still receive payment on the loan.
What is a drawback of a VA loan?
There's a flip side to every form of financing, including VA loans: Funding fee – While you won't pay for mortgage insurance with a VA loan, you will pay a funding fee at closing (although this fee can be financed into your loan, increasing the total amount you owe).
What is the biggest advantage of a VA loan?
By far, the single-largest benefit of the VA loan is that qualified Veterans can purchase without a down payment. This huge advantage allows Veterans and service members to buy homes without having to spend years saving for that typical lump-sum payment. Check your eligibility for a $0 down VA loan.
When can you not use a VA loan?
The Bottom Line: No Limits On VA Loan Use, But Understand Your Entitlement. The most important takeaway is that, as long as you're eligible and you're able to qualify with a lender, there's no limit to how many times you can take out a VA loan in your lifetime.